Judge sides with Quixtar distributors

GRAND RAPIDS -- A Kent County judge dealt Alticor and its Quixtar division a blow Friday, releasing a ruling that sided with a group of former high-level distributors.

Quixtar had alleged former distributors Orrin and Laurie Woodward, Chris and Terri Brady and TEAM, a motivational products company they helped found, were in violation of an injunction issued in late August forbidding them from disparaging the company, or using information they'd gained when they were affiliated with Quixtar.

The defendants were among a group of high-level distributors that parted ways with Quixtar in August -- Quixtar says they were terminated, the distributors said they resigned -- resulting in lawsuits and the resignation of 15,000 other distributors.

Quixtar sued the Woodwards, Bradys and others to try to enforce its non-compete, non-disclosure and mandatory arbitration clause with its distributors.

Chief Circuit Court Judge Paul Sullivan said the evidence presented over three days in October wasn't compelling enough to show the Bradys, Woodwards or TEAM's leadership were directly involved in disseminating negative information about Quixtar or in urging distributors to resign.

Sullivan said there appeared to be at least two "technical violations" of his order by members of TEAM who suggested people quit Quixtar. But because those members were not named as defendants, and there was no evidence showing they acted in concert with one, their actions were not in violation of the court order.

Sullivan earlier had ruled a large TEAM meeting in Louisville, Ky., could be held.

"The testimony of the defendants and other high-ranking TEAM officials is that the named defendants were aware of the order and attempted to comply," Sullivan wrote.

No date has been set for the arbitration case to begin. Since the situation erupted, Quixtar has required distributors to discontinue using and selling TEAM materials in conjunction with their Quixtar businesses.